Tuesday Aug 5th

And for those that like the longer term observations, one has to see upside potential in this $CRB chart:

www.graceland-updates.com/images/stories/14aug/2014aug5crb1.png

or here is the writeup:

www.321gold.com/editorials/thomson_s/thomson_s_080514.html

"King Dollar". F*#k that is annoying.

No fills yet, but did place a few buy limit orders to trigger when GDX gets below $25.50 I'll put a few more in to trigger at $25. I'm fine with all this "action" which is a non-event in my time frame. I think people are looking to hard into every little wiggle, then projecting the trend to continue (lower or higher), when it's not even a trend. Those that bought strength have done nothing but sell the wiggle down two days later, the old "chasers will get punished" routine.

I have no idea where gold is going tomorrow and it's not relevant for my hold time, but if any "trend" could be called, it would be for gold and miners to reverse and go higher yet again over the next few days. We've done nothing but go sideways if one steps back before looking at the charts, so even the short term people should be buying the little dips and selling the little rallies, not what we've been seeing in the blogosphere.

Well we got the silver drop but gold and gdx still trying to hang on.

Starting to think 8th low, 14th high, 29th major low. Let's see how it looks on Friday.

King Dollar, LMAO! Just caught that one.

That's one part of the problem. The other part is that for some reason, people insist on trading miners off of gold's cycle, which is like trading energy stocks by only watching the price of oil. It seems much simpler to watch the price (chart) of your asset and buy at support when it is oversold and sell when it is overbought or at resistance. Plus, if you don't know the daily cycle count, I doubt you are going to be able to know where things are headed over the longer term with the same method. Cycle's are much more effective (imo) in strong established trends, but even then the chart can provide the highs and lows without counting days and then making predictions weeks ahead of time. Way to much time dedicated to predicting things and not nearly enough managing scenarios and outcomes, imo.

Edit: If I was relying exclusively on cycles as my framework, I would not be anywhere near the PM sector. Too many better behaving assets out there.

Last week I mentioned the 231.43 level on the HUI Index and we broke this marginally today. It is not uncommon to rally and create a fake/trap type of scenario but I believe the break below this level should bring about a "final" decline (what remains is how this decline unfolds) that may very well test the low 200's. Based on what i am seeing "now" however, this test will be successful and will act as a most bullish springboard that will really push the miners much, much higher. If we don't make it all the way down there, the current correction has now created the most recent highs (early July highs) as points that if broken should also act a legitimate breakout. I know it's popular to be making predictions but as we've seen repeatedly over the last couple of years, such predictions have been a bunch of malarkey. In my book, miners made a major low in December, rallied hard into March, and for all intents and purposes we are still correcting/consolidating the early year run-up, albeit after having successfully retested in May/June. This move down currently should prove to be the final re-test and this is the one I am getting ready to pick apart my favorite miners. (XAU 88/93 should be it on the downside)

I'm not an EW expert but I think a little more lower would complete 5 down on SPX. Also I have strong support at around 1912-1913. Would also possibly be set up for positive divergence.

The list Simonsays has highlighted here is a good one IMO. Of course there are plenty more but all one really needs is a group of 8-10 and should be okay. Among the biggies however, there aren't many that shine, maybe GG as it appears to be the "best" form the "worst". I continue to like FNV, I have owned it for quite a while and I am now looking at RGLD as well for a place to enter. Rio Alto (RIOM or RIO.to) is a great value play and should be looked at. 

Jeff Clark, the only person at Stansberry worth listening to IMHO, had a pretty strong argument earlier today for an imminent bounce in stocks.

On the other hand, my Oct VIX ($14) calls were up 25% today on a 12% increase in the VIX, hitting the high for the day on the final trade.  So there's a lot of nervousness out there right now. I sold 2/3 of my position at today's high for a small profit after being severely underwater for the last month.  I also own the December calls and hoping for an opportunity to add more on the final rally of this Bull.